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Employers Add 263,000 Jobs in April, More Than Expected

Last Updated May 3, 2019 at 9:37 am ET

Economists surveyed by The Wall Street Journal had expected the government to report that employers added a seasonally adjusted 190,000 jobs in April. The unemployment rate ticked down to 3.6% last month while average hourly earnings grew 3.2% from a year earlier.

Updates

Key Takeaways from the April Jobs Report

Unemployment Among Low-Skilled Workers Drops

Stocks Rise After the Opening Bell

Prime-Age Workers Bowed Out of Labor Market in April

Length of Unemployment Ticked Down in April

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Key Takeaways from the April Jobs Report

Thanks for joining us on this Friday for our coverage of the jobs report. To read more, please check out our main story from the jobs report and markets coverage. Here are our key takeaways from the report:

U.S. employers picked up the pace of hiring in April and the unemployment rate dropped to a near 50-year low, adding to signs of a strong U.S. economy. Coupled with contained inflation, that combination is a favorable one for stocks to continue rising, some analysts say.

A wage-growth miss will increase focus on upcoming inflation data and Fed speeches. Wages grew 3.2% from a year earlier last month, coming in below the 3.3% estimate and again indicating that the current pace of wage growth isn’t likely to translate to rising inflation. Upcoming inflation data will now take on greater importance after a soft patch has kept the Federal Reserve on hold with interest rates.

Hiring rose across most sectors, including professional and business services, construction and health care. Manufacturing employment was little changed for the third consecutive month, however, a potentially worrisome sign for investors wary of a slowdown in factory activity as trade talks between the U.S. and China drag on.

Jessica Menton, Amrith Ramkumar

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Unemployment Among Low-Skilled Workers Drops

The labor market improved in April for low-skilled workers. The unemployment rate for workers with less than a high-school education dropped considerably, to 5.4% from 5.9% in March. High-school graduates also saw their unemployment rate drop, to 3.5% from 3.7%.

The most educated are still the most likely to be employed: College graduates' unemployment rate was 2.1% in April and for workers with some college it was 3.1%.

Harriet Torry

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Stocks Rise After the Opening Bell

Stocks are climbing early in Friday's session following another upbeat jobs report, with the S&P 500 up 0.4% but still on track for a weekly decline and slightly below Tuesday's record.

Bond yields have continued to slide, meanwhile, with the 10-year U.S. Treasury yield down at 2.532%. The WSJ Dollar Index has also pared an earlier advance and is now down less than 0.1%

Amrith Ramkumar

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Prime-Age Workers Bowed Out of Labor Market in April

The labor-force participation rate for workers 25 to 54, ages when school and retirement aren't big factors, fell again last month, even as payrolls jumped and wages rose. Employers had been drawing more workers off of the sidelines.

Harriet Torry

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Length of Unemployment Ticked Down in April

The median spell of unemployment, which has remained stubbornly higher than it was before the last recession, has dipped a bit to 9.4 weeks, according to the April jobs report. That's slightly lower than the March median duration.

Crude Prices Tick Lower

U.S. oil prices slipped following the employment report. Crude prices fell 0.1% to $61.76 a barrel, after rising 0.1% ahead of the data. Crude prices came under pressure Thursday amid fears of a supply glut.

Some analysts said the report was a mixed bag for oil prices.

"The downside for oil is that this report still follows weak PMIs and is likely to send the dollar higher," Jason Schenker, president of Prestige Economics, said in a note Friday. "But the big upside for oil, of course, is that this kind of jobs report underscores the potential strength in demand for gasoline during the upcoming U.S. summer driving season. People have jobs and wages are up. Miles driven will as well."

Jessica Menton

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Another Strong Week of Flows Into Bond Funds

With bonds rallying again Friday, investors were also weighing figures showing nearly $10 billion flowed into global bond funds during the week ended Wednesday, according to a Bank of America Merrill Lynch analysis of figures from EPFR Global.

The latest inflow continues a trend from early in the year, with investors caution that inflation will pick up. About $300 million flowed out of global equity funds during the week, also extending an early year trend.

Amrith Ramkumar

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Broadest Measure of Unemployment Stays Put

In good news for workers, some of the Labor Department's broader measures of unemployment declined in April. Still, the broadest measure of underemployment, which also includes part-time workers who would like full-time work, has been unchanged since February.

Harriet Torry

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Up Next After Packed Week: More Earnings and Trade Talks

After a packed week with the Fed meeting, jobs report and a busy leg of earnings season, investors will now turn their attention to next week's trade talks in Washington, set to begin Wednesday.

With this week's developments bolstering faith in the U.S. economy, some analysts say a trade agreement could further lend support to this year's broad market rally and boost the outlook for the global economy. Any setbacks could have the opposite effect.

There will also be more earnings to watch, including results from AIG, Disney and Lyft.

Amrith Ramkumar

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Slow Wage Growth Supports Bond Bets

Weaker-than-forecast average hourly earnings growth of 0.2% in April led bond investors to bet on a slower pace of inflation, and to hold on to wagers that the Federal Reserve’s next move will be to cut interest rates, analysts said.

The futures market is pricing in about 50% odds that policy makers will cut rates by year-end, even as the unemployment rate fell to 3.6% in April.

While Fed Chairman Jerome Powell described recent weak price pressure as temporary, investors believe low inflation has lasted “for a lot longer period than transitory,” said Larry Milstein, head of Treasury trading at R.W. Pressprich & Co. Bond yields suggest inflation of less than 1.9% for the next 10 years, missing the Fed’s 2% target.

Daniel Kruger

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Gold Prices Jump as Inflation Fears Fade

Another sign traders aren't pricing in a pickup in inflation: gold prices are near their highs for the day.

The precious metal struggles to compete with yield-bearing investments when borrowing costs rise. But with wage growth underwhelming, traders aren't betting that the Federal Reserve will have to raise rates anytime soon.

To be sure, some investors use gold to hedge against a rise in inflation, but moves in Treasury yields and the dollar are having more of an impact lately, analysts say.

Akane Otani

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Analyst: Still Expect No Fed Rate Changes in 2019

Some analysts say Friday's data does little to change expectations that the Fed will leave interest rates where they are moving forward.

"The pace of wage inflation does not change our Fed forecasts for no rate changes this year," says Jason Schenker, the president of Prestige Economics, in a note. "The Fed is in a dovish position, but it would be difficult for the Fed to be more dovish this year. "

Amrith Ramkumar

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Weekly Wage Growth Slowed in April

Weekly wage growth slowed in April, to a 2.9% year-over-year pace. That's the first time it slipped below the 3% mark since January 2018. Hourly wages increased at a 3.2% pace over the past year in April, the same as in March.

Harriet Torry

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Investors Still Betting the Fed Will Cut Rates

Federal-funds futures showed the market is pricing in a 64% chance that the Federal Reserve will lower interest rates at least one time this year, according to data from CME Group. That’s up from 63% a week ago and 60% a month ago.

Jessica Menton

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Spring Pickup in Payrolls

The total number of nonfarm payroll jobs rose by 1.76% over the past year. The strong April jobs report marks a pickup after a mixed winter for hiring, with strong payroll gains in December and January, followed by a weak February and better job growth in March.

Treasury Yields Fall After Brief Pop

Stock Futures Stay Higher While Bond Yields Fall

S&P 500 futures are still up 0.5%, while Treasury yields and the dollar are paring their earlier advances as investors parse the latest wage-growth incease of 3.2% from a year earlier.

The 10-year U.S. Treasury yield is back down to 2.554%, after briefly touching 2.575% earlier in the day, while the WSJ Dollar Index is up less than 0.1%. Bond yields and the dollar have been climbing since Fed Chairman Powell's comments Wednesday that surprised some analysts who had expected an interest-rate cut this year.

Amrith Ramkumar

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One Analyst Says Don't Count Out Wage Growth Entirely

Today's average hourly earnings print was a touch shy of expectations--the latest in a string of readings that have suggested inflationary pressures aren't picking up much yet. But one analyst thinks it's too early to count out wage inflation:

Akane Otani

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Wage-Growth Number Increases Focus on Upcoming Fed Speakers

After Fed Chairman Jerome Powell said Wednesday that he thinks a recent soft patch of inflation will pass and that the central bank feels comfortable leaving rates where they are, a softer-than-expected wage growth figure for April will increase focus on several Fed speeches later today.

Here's the list of Fed officials speaking today:

Chicago’s Charles Evans speaks on the economy and monetary policy in Stockholm at 10:15 a.m. ET, and a Stanford University monetary policy conference features Vice Chairman Richard Clarida at 11:30 a.m. ET, New York’s John Williams at 12:45 p.m. ET, Governor Michelle Bowman at 3:00 p.m. ET, Cleveland’s Loretta Mester, Dallas's Robert Kaplan, San Francisco’s Mary Daly and St. Louis’s James Bullard at 8:00 p.m. ET, and Mr. Clarida again at 9:30 p.m. ET.

Amrith Ramkumar

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Manufacturing Employment Little Changed Again

Manufacturers added just 4,000 jobs in April, the third consecutive month the sector was little changed.

In the 12 months prior to February, the group had added 22,000 jobs per month.

Coupled with weak gauges of factory activity around the world, the slowdown in manufacturing hiring could keep some investors worried about that segment of the economy with U.S.-China trade talks still ongoing.

Amrith Ramkumar

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Professional and Business Services Group Leads Hiring

Bright spots for hiring last month included professional and business services, construction and health care.

More than 75,000 profesional and business services jobs were added, while construction and health-care employers each added roughly 30,000 jobs.

Amrith Ramkumar

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Report Offers Ideal Combination for Stock Market

As far as the stock market is concerned, this was pretty much a Goldilocks-type jobs report. The labor market remains strong without showing any signs of inflationary pressures racing higher--a combination that investors say should help share prices continue their 2019 rise.

"This is another loud and clear signal that the economy is in really good shape. Jobs—check, wages—check, earnings—check, and tame inflation—check," said Mike Loewengart, vice president of investment strategy at E*Trade, in an email. "We’re getting to a point where it’s hard to find something to be concerned about."

S&P 500 futures are up 0.5%, extending gains from before the jobs report.

Akane Otani

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February Hiring Revised Higher

February hiring was revised higher to 56,000 jobs added from 33,000 previously, while March was revised down slightly to 189,000 to 196,000.

More broadly, Friday's data should ease some fears of a hiring slowdown that were ignited by February's preliminary reading of 20,000 jobs added that month.

In the first four months of 2019, employers added an average of 205,000 jobs, in line with the average added during the 100+ month streak of job creation.

Amrith Ramkumar, Eric Morath

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Weak Wage Growth Keeps Bond Yields Under Pressure

While non-farm payrolls jumped past expectations, coming in at 263,000 versus estimates of 190,000, average hourly earnings only rose 0.2% in April from the month before. That's less than the 0.3% that economists were expecting and another sign that inflation isn't quite picking up the way that Federal Reserve officials had anticipated last year.

The yield on the two-year Treasury note, which tends to move in line with expectations for monetary policy, was at 2.361%, down slightly from before the report. Federal-funds futures were little changed, showing traders still pricing in around a one in three chance of one rate cut by year-end.